CHAPTER 1

MANAGING IN TURBULENT TIMES CHAPTER OUTLINE

I. Managers Challenge II. The Definition of Management III. The Four Management Functions A. Planning B. Organizing C. Leading D. Controlling III. Organizational Performance IV. Management Skills A. Conceptual Skills B. Human Skills C. Technical Skills D. When Skills Fail V. Management Types A. Vertical Differences B. Horizontal Differences VI. What Is It Like to Be a Manager? A. Making the Leap: Becoming a New Manager B. Manager Activities C. Manager Roles VII. Managing in Small Businesses and Nonprofit Organizations VIII. Management and the New Workplace A. Forces on Organizations B. The Innovative Response C. New Management Competencies D. Turbulent Times: Managing Crises and Unexpected Events

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ANNOTATED LEARNING OBJECTIVES

After studying this chapter, students should be able to: 1. Describe the four management functions and the type of management activity associated with each. The management functions are planning, organizing, leading, and controlling. Planning means defining goals for future organizational performance and deciding on the tasks and use of resources needed to attain them. The management activity associated with planning is to select goals and ways to attain them. Organizing typically follows planning and reflects how the organization will try to accomplish the plan. The management activity associated with organizing is assigning responsibility for task accomplishment. Leading is the use of influence to motivate employees to achieve the organizations goals. The management activity associated with leading is motivating employees. Controlling means monitoring employees activities, keeping the organization on track toward its goals, and making corrections as needed. The management activities associated with controlling are monitoring activities and making corrections. 2. Explain the difference between efficiency and effectiveness and their importance for organizational performance. Organizational effectiveness is the degree to which the organization achieves a stated objective. It means the organization succeeds in accomplishing what it tries to do. Organizational efficiency refers to the amount of resources used to achieve an organizational goal. It is based on the amount of raw materials, money, and people necessary for producing a given volume of output. 3. Describe management types and the horizontal and vertical differences between them. The management types under vertical differences are the top managers, middle managers, project managers, and first-line managers. Top managers are at the top of the organizational hierarchy and are responsible for the entire organization. A middle manager is one who works at the middle levels of the organization and is responsible for major departments. A project manager is responsible for a temporary work project that involves the participation of people from various functions and levels of the organization, and perhaps from outside the company as well. First-line managers are directly responsible for the production of goods and services. Functional managers and general managers functions occur horizontally across the organization. Functional managers are responsible for departments that perform a single functional task and have employees with similar training and skills. General managers are responsible for several departments that perform different functions. 4. Describe conceptual, human, and technical skills and their relevance for managers and employees. Conceptual skill is the mental ability to see the organization as a whole and the relationship among its parts. It is the managers thinking and planning ability. Conceptual skills are needed by all managers, but are especially important for top managers. Human skill is the managers
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Managing in Turbulent Times 3

ability to work with and through other people. It is evident in how a manager relates to other people, including the ability to motivate, facilitate, coordinate, lead, communicate, and resolve conflict. Technical skill is the understanding of and proficiency in the performance of specific tasks such as engineering, manufacturing, or finance. Technical skills are most important at lower organizational levels. The major difference between non-managers and managers is the shift from reliance on technical skills to a greater focus on human and conceptual skills. 5. Define 10 roles that managers perform in organizations. A role is a set of expectations for a managers behavior. The ten roles are divided into three categories: informational, interpersonal, and decisional. Informational roles include the functions used to maintain and develop an information network. The monitor role involves seeking current information from many sources. The disseminator role is the opposite of the monitor role. In the disseminator role, the manager transmits information to others, both inside and outside the organization. The spokesperson role pertains to making official statements to people outside the organization about company policies, actions, or plans. Interpersonal roles refer to relationships with others and are related to human skills. The figurehead role involves the handling of ceremonial and symbolic functions for the organization. The leader role is the relationship with subordinates including motivation, communication, and influence. The liaison role is the development of information sources both inside and outside the organizations. Decisional roles come into play when managers must make choices. These roles often require both conceptual and human skills. The entrepreneur role involves the initiation of change. Managers seek ways to solve problems or improve operations. The disturbance handler role involves resolving conflict among subordinates, between managers, or between departments. The resource allocator role pertains to allocating resources in order to attain desired outcomes. The negotiator role involves formal negotiations and bargaining to attain outcomes for the managers unit of responsibility. 6. Understand the personal challenges involved in becoming a new manager in an organization in todays world. Becoming a new manager requires a profound transformation in the way a person thinks of himself or herself, called personal identity. It involves letting go of deeply held attitudes and habits and learning new ways of thinking. Some of the challenges include transitioning from thinking of oneself as a specialist who performs specific tasks to thinking of oneself as a generalist who coordinates diverse tasks, doing things yourself to getting things done through others, being an individual actor to being a network builder, and working independently to working interdependently.
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4 Chapter 1

7. Discuss the management competencies needed to deal with todays turbulent environment, including issues such as diversity, globalization, and rapid change. Globalization, diversity, and increased competition are changing both the nature of managerial work and the paths to career advancement. In the new paradigm, the primary responsibility of management is to create learning capability throughout the organization. Many companies are reinventing themselves toward something called the learning organization. This is a philosophy or attitude addressing what an organization is and the role of employees. Everyone in the organization participates in identifying and solving problems, enabling the organization to continuously experiment, improve, and increase capability. The focus is on quality and customer satisfaction. The learning organization emphasizes teams and systems rather than hierarchy to maximize performance. Rapid environmental shifts are causing fundamental transformations that have a dramatic impact on the managers job. The shift from an industrial age to an information age has altered the nature of work, employees, and the workplace itself. In the new workplace work is free flowing and flexible. The shift is most obvious in e-commerce and Internet-based organizations. All organizations are facing the need for greater speed and flexibility. The most striking change now affecting organizations and management is technology. One of the biggest technological advances is the Internet, which is transforming the way business is done. People around the world are connected in the flow of information, money, ideas, and products. Interdependencies are increasing. Customers today operate globally and they expect organizations to provide worldwide service. Managers have to understand cross-cultural patterns, and they often work with virtual team members from many different countries. Diversity of the population and the work force has become a fact of life for all organizations. Organizations are learning to value change and speed over stability and efficiency. The new paradigm recognizes change and chaos are the natural order of things. Events in todays world are turbulent and unpredictable, with both small and large crises occurring on a more frequent basis. Managers must rethink their approach to organizing, directing, and motivating workers. 8. Explain the leadership skills needed for effective crisis management. The leadership skills needed for effective crisis management include staying calm, being visible, putting people before business, telling the truth, and knowing when to get back to business. A leaders emotions are contagious, so leaders have to stay calm, focused, and optimistic about the future. Being visible is important when peoples worlds have become ambiguous and uncertain, because they need to feel that someone is in control. The companies that weather a crisis best are those in which managers make people their top priority. Managers should get as much information from as many diverse sources as they can, do their best to determine the facts, and then be open and straightforward about whats going on. Managers should first deal with the physical and emotional needs of people, but they also need to get back to business as soon as possible. Crisis management is an important aspect of any managers job, particularly in todays turbulent times. This is a challenging time to be entering the field of management.

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Managing in Turbulent Times 5

LECTURE OUTLINE
Melvin Wilson, a mid-level marketing manager for Mississippi Power suddenly found himself responsible for coordinating the feeding, housing, and health care of 11,000 repair workers from around the country in the aftermath of Hurricane Katrina. The utility companys corporate headquarters and disaster response center were both destroyed by the hurricane, and early recovery work had to be done without access to computers, phones, or basic sanitary facilities. Amazingly, Mississippi Power restored power in just 12 days. The tale of how they did it is one of the great crisis management stories of modern times, and a lesson for managers in how much can be accomplished quickly when its managed right. I. MANAGERS CHALLENGE In todays turbulent world, managing in times of crisis and confusion is becoming a critical skill for managers in all kinds of organizations. The frequency and intensity of crises have increased over the past couple of decades, with a sharp increase in the rate of intentional acts such as product tampering, workplace violence, and terrorism. The shift toward new ways of working, enabled by technology, puts additional demands on todays managers. Making a difference as a manager today and tomorrow requires integrating solid, tried-and-true management skills with innovative approaches that emphasize the human touch, enhance flexibility, and engage employees hearts and minds as well as their bodies.
II.

THE DEFINITION OF MANAGEMENT

Exhibit 1.1

Management is the attainment of organizational goals in an effective and efficient manner through planning, organizing, leading, and controlling organizational resources. There are two important ideas in this definition: The attainment of organizational goals in an efficient and effective manner; and The four functions of planning, organizing, leading, and controlling. Some theorists also list staffing, communicating, or decision-making as functions of management, but this text covers these functions as subsets of the four primary functions listed above. Discussion Question #7: A college professor told her students, The purpose of a management course is to teach students about management, not to teach them to be managers. Do you agree or disagree with this statement? Discuss. NOTES_________________________________________________________________________ _____________________________________________________________________________ _________________________________________________________________________

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III. THE FOUR MANAGEMENT FUNCTIONS A. Planning

1.

Planning is the management function concerned with defining goals for future organizational performance and deciding on the tasks and resources needed to attain them. It defines where the organization wants to be in the future and how to get there.

B.

Organizing
1.

Organizing is the management function concerned with assigning tasks, grouping tasks into departments, and allocating resources to departments. Organizing follows planning and reflects how the organization tries to accomplish the plan.

C. Leading
1.

Leading is the management function that involves the use of influence to motivate employees to achieve the organizations goals. It involves motivating entire departments and divisions as well as those individuals working immediately with the manager.

D. Controlling
1.

Controlling is the management function concerned with monitoring employees activities, keeping the organization on track toward its goals, and making corrections as needed. Trends toward employment and trust of employees have led many companies to place less emphasis on top-down control and more emphasis on training employees to monitor and correct themselves.

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Managing in Turbulent Times 7

IV. ORGANIZATIONAL PERFORMANCE An organization is a social entity that is goal directed and deliberately structured. Social entity means two or more people. Goal directed means the organization is designed to achieve some outcome or goal such as make a profit. Deliberately structured means tasks are divided and responsibility for their performance is assigned to organization members. The managers responsibility is to coordinate resources in an effective and efficient manner to accomplish the organizations goals. Organizational effectiveness is the degree to which the organization achieves a stated goal, or succeeds in accomplishing what it tries to do. Organizational efficiency refers to the amount of resources used to achieve an organizational goal. It is based on the how much raw materials, money, and people are necessary for producing a given volume of output. The ultimate responsibility of managers is to achieve high performance, which is the organizations ability to attain its goals by using resources in an efficient and effective manner. Discussion Question #4: What is the difference between efficiency and effectiveness? Which is more important for performance? Can managers improve both simultaneously? NOTES_________________________________________________________________________ _____________________________________________________________________________ _________________________________________________________________________
V.

MANAGEMENT SKILLS A. Conceptual Skills

1.

Exhibit 1.2

Conceptual skill is the cognitive ability to see the organization as a whole and the relationships among its parts. It involves the managers thinking, information processing, and planning abilities, and means the ability to think strategicallyto take the broad, long-term view. Conceptual skill is especially important for top managers.

2.

B. Human Skills
1.

Human skill is the managers ability to work with and through other people and to work effectively as a group member. It is demonstrated in the way a manager motivates, facilitates, coordinates, leads, communicates, and resolves conflicts. As globalization, workforce diversity, uncertainty, and societal turbulence increase, human skills become even more crucial. Human skill is important for managers at all levels, and particularly those who work with employees directly on a daily basis.

2.

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8 Chapter 1

C. Technical Skills
1.

Technical skill is the understanding of and proficiency in the performance of specific tasks. This includes mastery of the methods, techniques, and equipment involved in specific functions such as engineering, manufacturing, or finance. Technical skill also includes specialized knowledge, analytical ability, and competent use of tools and techniques to solve problems in that specific discipline. Technical skill is most important at lower organizational levels and become less important than human and conceptual skills as managers are promoted.

2.

D.

When Skills Fail 1. During turbulent times, managers must use all their skills and competencies to benefit the organization and its stakeholders.
2.

Many companies falter because managers fail to listen to customers, misinterpret signals from the market, or cant build a cohesive team and execute a strategic plan. Perhaps the biggest blunder is the managers failure to comprehend and adapt to the rapid pace of change in the world around them. A related problem is top managers who create a climate of fear so that people are afraid to tell the truth; bad news gets hidden and market signals are missed. Other management missteps include poor communication and failure to listen, treating people as instruments, suppressing dissent, and the inability to build a management team characterized by mutual trust and respect.

3.

4.

Discussion Question #10: How do you feel about having a managers responsibility in todays world characterized by uncertainty, ambiguity, and sudden changes or threats from the environment? Describe some skills and qualities that are important to managers under these conditions. NOTES_________________________________________________________________________ _____________________________________________________________________________ _________________________________________________________________________

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Managing in Turbulent Times 9

VI.

MANAGEMENT TYPES A. Vertical Differences

1.

Exhibit 1.3

Top managers are at the top of the organizational hierarchy and are responsible for the entire organization, with titles such as president, chairperson, executive director, CEO, and executive vice president. They are concerned with long-range planning. Responsibilities of top managers include: a. setting organizational goals; b. defining strategies for achieving them; c. monitoring and interpreting the external environment; d. making decisions that affect the entire organization; e. communicating a shared vision for the organization; f. shaping corporate culture; and g. nurturing an entrepreneurial spirit.

2.

Middle managers work at the middle levels of the organization and are responsible for business units and major departments, with titles such as department head, division head, manager of quality control, and director of the research lab. They are concerned with near-future planning. Responsibilities of middle managers center on implementing strategies and policies defined by top managers. a. Research shows that middle managers play a critical role in facilitating change and enabling organizations to respond in rapid shifts in the environment. b. Successful middle managers are constructively critical of the status quo, have a significant personal power, are versatile, and rate high in emotional intelligence.

3.

Project managers are responsible for temporary work projects that involve the participation of people from various functions and levels of the organization, and perhaps from outside the company as well. First-line managers are at the first or second management level and are directly responsible for the production of goods and services, with titles such as supervisor, line manager, section chief, and office manager. Their focus in on accomplishing day-to-day objectives. Responsibilities of first-line managers include: a. applying rules and procedures to achieve efficient production; b. providing technical assistance; and

4.

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10 Chapter 1

c. motivating subordinates. Discussion Question #8: Assume you are a project manager at a biotechnology company, working with managers from research, production, and marketing on a major product modification. You notice that every memo you receive from the marketing manager has been copied to senior management. At every company function, she spends time talking to the big shots. You are also aware that sometimes when you and the other project members are slaving away over the project, she is playing golf with senior managers. What is your evaluation of her behavior? As project manager, what do you do? NOTES_________________________________________________________________________ _____________________________________________________________________________ _________________________________________________________________________ B. Horizontal Differences 1. Horizontal differences in management jobs occur across the organization in the different functional areas such as advertising, sales, finance, human resources, manufacturing, and accounting.
2.

Functional managers are responsible for departments that perform a single functional task and have employees with similar training and skills. a. Line managers are responsible for employees who make or provide a product or service. b. Staff managers are in charge of departments such as finance and personnel that support line departments.

3.

General managers are responsible for several departments that perform different functions.

Discussion Question #9: You are a bright, hard-working entry-level manager who fully intends to rise up through the ranks. Your performance evaluation gives you high marks for your technical skills but low marks when it comes to people skills. Do you think people skills can be learned, or do you need to rethink your career path? If people skills can be learned, how would you go about it? NOTES_________________________________________________________________________ _____________________________________________________________________________ _________________________________________________________________________ VII. WHAT IS IT LIKE TO BE A MANAGER? Exhibit 1.4 A. Making the Leap: Becoming a New Manager
1.

Becoming a manager involves a profound transformation in the way people think of themselves, called personal identity, that includes letting go of deeply held attitudes

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Managing in Turbulent Times 11

and learning new ways of thinking. Specific aspects of this transformation include changing ones identity: a. from a specialist who performs specific tasks to a generalist who coordinates diverse tasks; b. from doing things oneself to getting things done through others; c. from an individual actor to a network builder; and d. from working relatively independently to working in a highly interdependent manner. B. Manager Activities 1. Most new managers are unprepared for the variety of activities managers routinely perform. a. Managerial activity is characterized by variety, fragmentation, and brevity. The average time spent on any one activity is less than nine minutes, and managers must be able to shift gears quickly. Managers perform a great deal of work at an unrelenting pace, requiring great energy. Discussion Question #5: If managerial work is characterized by variety, fragmentation, and brevity, how do managers perform basic management functions such as planning, which would seem to require reflection and analysis? NOTES________________________________________________________________________ _____________________________________________________________________________ __________________________________________________________________________
C.

Manager Roles
1.

Exhibit 1.5

A role is a set of expectations for a managers behavior. Managers activities can be organized into ten roles. The ten roles are divided into three categories: informational, interpersonal, and decisional. Informational roles include the functions used to maintain and develop an information network. a. The monitor role involves seeking current information from many sources. b. The disseminator role is the opposite of the monitor role. In the disseminator role, the manager transmits information to others, both inside and outside the organization. c. The spokesperson role pertains to making official statements to people outside the organization about company policies, actions, or plans.

2.

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12 Chapter 1

3.

Interpersonal roles refer to relationships with others and are related to human skills. a. The figurehead role involves the handling of ceremonial and symbolic functions for the organization. b. The leader role is the relationship with subordinates including motivation, communication, and influence. c. The liaison role is the development of information sources both inside and outside the organizations.

4.

Decisional roles come into play when managers must make choices. These roles often require both conceptual and human skills. a. The entrepreneur role involves the initiation of change. Managers seek ways to solve problems or improve operations. b. The disturbance handler role involves resolving conflict among subordinates, between managers, or between departments. c. The resource allocator role pertains to allocating resources in order to attain desired outcomes. d. The negotiator role involves formal negotiations and bargaining to attain outcomes for the managers unit of responsibility.

Discussion Question #2: Why do some organizations seem to have a new CEO every year or two, whereas others have top leaders who stay with the company for many years (e.g., Jack Welchs 20 years as CEO at General Electric)? What factors about the manager or about the company might account for this difference?

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Managing in Turbulent Times 13

NOTES_________________________________________________________________________ _____________________________________________________________________________ _________________________________________________________________________

VIII.

MANAGING IN SMALL BUSINESSES AND NONPROFIT ORGANIZATIONS

Small companies have difficulty developing the managerial dexterity needed to survive in a turbulent environment. Small business managers tend to emphasize different roles from those emphasized by managers in large corporations. They see their most important role as that of spokesperson in promoting their business to the outside world. The entrepreneur role is also critical. Nonprofit organizations represent a major application of management talent. The functions of planning, organizing, leading, and controlling apply just as in other organizations. Managers in nonprofit organizations direct their efforts toward generating some kind of social impact. Financial resources for nonprofit organizations typically come from government appropriations, grants, and donations rather than from the sale of products or services to customers. The spokesperson role is heavily emphasized in nonprofit organizations to sells the organization, similarly to small businesses, except that in nonprofit organizations the goal is to increase awareness of the organizations mission, increase the scope of its impact, and generate additional resources rather than to increase the consumer base. Unlocking Innovative Solutions Through TECHNOLOGY Click Here for Lower Taxes Government agencies are often thought of as plodding, inefficient bureaucracies that waste the publics time and money. Now some government agencies apply Internet technology to provide information and deliver services rapidly while saving taxpayers money. The U.S. Internal Revenue Service has made the distribution of its tax forms a major focus of its website. More than 100 million tax forms are downloaded directly, with each request costing the IRS only a fraction of a penny. E-filing saves time and money for both taxpayers and the IRS. The transition to the Internet is helping to shatter the image of government workers as paper shufflers, replacing it with one of committed people providing real and valuable services to the public. NOTES_________________________________________________________________________ _____________________________________________________________________________ _________________________________________________________________________
IX.

MANAGEMENT AND THE NEW WORKPLACE

Exhibit 1.7

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14 Chapter 1

The old workplace was characterized by routine, specialized tasks, and standardized control procedures. The organization was coordinated through the vertical hierarchy, with decisionmaking authority residing almost exclusively in upper-level managers. Rapid environmental shifts are causing fundamental transformations that have a dramatic impact on the managers job, creating a new workplace organized around information and ideas rather than machines and physical assets. Low-cost computing power means that ideas, documents, movies, and data can be spread around the world at the speed of light. Work is free-flowing and flexible. The shift is most obvious in ecommerce and high-tech communications, which must respond to changing markets and competition at a moments notice. Knowledge is widely shared. The workplace is organized around networks rather than rigid hierarchies, and work is often virtual, with managers supervising people who never come to work in the traditional sense. The valued worker is one who learns quickly, shares knowledge, and is comfortable with risk, change, and ambiguity. A. Forces on Organizations
1.

The most striking change now affecting organizations and management is technology. The Internet is transforming the way business is done. a. Many organizations use digital networking technologies to tie together employees and company partners in far-flung operations. b. The Internet and other new technologies are also tied closely to globalization.

c. Global interconnections bring many opportunities but also threats, new risks, and increased complexity and competitiveness (e.g. outsourcing to low-cost providers).
2.

Diversity of the workforce has become a fact of life for all organizations.

B. The Innovative Response

1.

In the face of these rapid transformations, organizations are learning to value change, innovation, and speed over stability and efficiency.

a. Increasing consumer access to information requires companies to provide increasingly better products and services to remain competitive. b. Intense competition from globalization spurs companies to keep pace with new technologies and management practices. C. New Management Competencies

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Managing in Turbulent Times 15

1.

Managers must rethink their approach to organizing, directing, and motivating employees.

a. Todays best managers give up their command-and-control mindset to focus on coaching and providing guidance, creating organizations that are fast, flexible, innovative, and relationship oriented.
2.

Leadership is dispersed throughout the organization, and managers empower others to gain the benefit of their ideas and creativity Success in the new workplace depends on the strength and quality of collaborative relationships, and managers realize the importance of staying connected to employees and customers. Team-building skills are crucial for todays managers. An important management challenge is to build a learning organization by creating an organizational climate that values experimentation and risk-taking, applies current technology, tolerates mistakes and failure, and rewards nontraditional thinking and knowledge sharing.

3.

4. 5.

Discussion Question #3: Discuss some of the ways organizations and jobs have changed over the past 10 years. What changes do you anticipate over the next 10 years? How might these changes affect the mangers job and the skills a manager needs to be successful? NOTES_________________________________________________________________________ _____________________________________________________________________________ _________________________________________________________________________
D.

Turbulent Times: Managing Crises And Unexpected Events

1.

Dealing with the unexpected has always been part of the managers job, but our world has become so fast, interconnected, and complex that unexpected events happen more frequently and often with greater and more painful consequences. Some of the most recent thinking on crisis management suggests the importance of five leadership skills.

a. Stay calm. A leaders emotions are contagious, so leaders have to be calm, focused, and optimistic about the future. b. Be visible. When the situation seems ambiguous and frightening, people need to feel that someone is in control. c. Put people before business. The companies that weather a crisis best are those in which the managers make people and human feelings their top priority.

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16 Chapter 1

d. Tell the truth. Managers should get as much information from as many sources as they can, do their best to determine the facts, and then be open and straightforward about what is happening. e. Know when to get back to business. Managers should first deal with the physical and emotional needs of people, but then they need to get back to business as soon as possible. Discussion Question #1: How might the teaching of a management course be designed to prepare future managers to deal with globalization and workforce diversity? What problems and opportunities do you think globalization and diversity present for managers? NOTES_________________________________________________________________________ _____________________________________________________________________________ _________________________________________________________________________

Suggested Answers to End-of-Chapter Discussion Questions

1. How might the teaching of a management course be designed to prepare future managers to deal with globalization and workforce diversity? What problems and opportunities do you think globalization and diversity present for managers? Preparing future managers to deal with globalization and workforce diversity is a challenge for management educators. Learning how to motivate and work in and with diverse cultures and ethnic groups will be critical to success. Management courses can be designed to emphasize the growing diversity of the workforce in America, as well as cultural differences around the world. A future manager must be able to appreciate and understand different needs that will be demonstrated through different subcultures. Workforce diversity will have a substantial impact on employees and organizations in the future. Due to changing technologies to achieve organization objectives, management must be able to integrate the concept of workforce diversity. Managers must learn to retain their effectiveness during crises and unexpected events such as terrorist attacks. Also, managers increasingly have the opportunity to hire the best people worldwide, using the Internet and virtual teams. 2. Why do some organizations seem to have a new CEO every year or two, whereas others have top leaders who stay with the company for many years (e.g., Jack Welchs 20 years as CEO at General Electric)? What factors about the manager or about the company might account for this difference? Todays firms are challenged by continuous change and chaos, and compete in a dynamic environment that is in continuous motion. The CEOs are confronted with continuous pressure to get results that will satisfy stockholder needs. When they fall short; they are replaced due to turbulence, internal and external environmental forces. CEOs like Jack Welch, of General Electric, have the vision and leadership to move the organization ahead and implement strategies
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Managing in Turbulent Times 17

to achieve desired goals. This type of CEO has the ability to get results with and through people internally, as well as to satisfy the boards of directors and stockholders of these giant organizations. CEO factors that may account for differences in tenure center on that individuals ability to anticipate and develop strategies to address rapidly developing changes in their external environments, as well as the internal forces of the organization. They are able to build cohesive management teams that empower employees to respond quickly to changing conditions and market developments. On an organizational level, the companies that excel in such turbulent times have strong cultures of empowerment, innovation, risk taking, and flexibility. 3. Discuss some of the ways organizations and jobs have changed over the past 10 years. What changes do you anticipate over the next 10 years? How might these changes affect the managers job and the skills a manager needs to be successful? In the new workplace, work is free-flowing and flexible to encourage speed and adaptation, and empowered employees are expected to seize opportunities and solve problems. The workplace is organized around networks rather than vertical hierarchies, and work is often virtual. These changing characteristics have resulted from forces such as advances in technology and ebusiness, globalization, increased diversity, and a growing emphasis on change and speed over stability and efficiency. Managers need new skills and competencies in this new environment. Leadership is dispersed and empowering. Customer relationships are critical, and most work is done by teams that work directly with customers. These changes will continue over the next 10 years, driven largely by the rapidly increasing rate of technological advancement. In the new workplace, managers must focus on building relationships, which may include customers, partners, and suppliers. In addition, they must strive to build learning capability throughout the organization in order to keep up with technological developments. 4. What is the difference between efficiency and effectiveness? Which is more important for performance? Can managers improve both simultaneously? Organizational effectiveness is the degree to which the organization achieves a stated goal, or succeeds in accomplishing what it tries to do. Organizational efficiency refers to the amount of resources used to achieve an organizational goal. It is based on the how much raw materials, money, and people are necessary for producing a given volume of output. The ultimate responsibility of managers is to achieve high performance, which is the organizations ability to attain its goals by using resources in an efficient and effective manner. Although efficiency and effectiveness are both important for performance, most people would probably say that effectiveness is the more important concept. The reason is that internal efficiency has no value if it does not enable the organization to achieve its goals and respond to the external environment. On the other hand, an organization that is effective does achieve its goals, by definition. One of these goals should involve continuously increasing efficiency.

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18 Chapter 1

Managers can and should improve both efficiency and effectiveness simultaneously. As noted above, one of any organizations primary goals should be to continuously improve efficiency. To the extent that the organization increases its success in achieving this goal, along with others, its effectiveness also improves. 5. If managerial work is characterized by variety, fragmentation, and brevity, how do managers perform basic management functions such as planning, which would seem to require reflection and analysis? Planning is not necessarily a solitary, reflective activity, although there are certainly times when such focused planning is important. Many managers do their planning intuitively during the course of day-to-day activities. Managers have an overall mental image of where the department, division, or organization is going, and they use fragmented day-to-day information to refine the image and to nudge the organization toward it. In this way, planning is accomplished, even though it is not done in solitary reflection. In addition, top managers often delegate some of the necessary planning to assistants or to planning groups. 6. Jeff Immelt of GE said that the most valuable thing he learned in business school was that there are 24 hours in a day, and you can use all of them. Do you agree or disagree? What are some of the advantages to this approach to being a manager? What are some of the drawbacks? Students opinions on this will vary. Immelt seems to be suggesting that many managers waste too much time doing unimportant things or nonbusiness-related things. Time management is an important skill for managers, and is becoming increasingly important with technological advances, because as is noted in the chapter, managerial activity is characterized by variety, fragmentation, and brevity. The average time spent on any one activity is less than nine minutes, and managers must be able to shift gears quickly. Managers perform a great deal of work at an unrelenting pace, requiring great energy, and the amount of work and the pace at which it must be performed continue to increase. 7. A college professor told her students, The purpose of a management course is to teach students about management, not to teach them to be managers. Do you agree or disagree with this statement? Discuss. Some students may believe that a college course will give them the necessary skills and abilities to be a manager. Others, especially those with management experience, will realize that they can learn about management through a course, but must learn the art of management through experience. Management courses, especially principles courses, provide the foundational knowledge upon which students can begin to develop their understanding of effective management practice. More advanced management courses can provide opportunities for students to begin practicing their skills in a relatively safe environment in much the same way that science courses provide students with the opportunity to practice their science skills through laboratory work. Still, these courses will not make competent managers of students. Skill in managing, or any other skill set, develops over time through practical experience.
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Managing in Turbulent Times 19

8. Assume you are a project manager at a biotechnology company, working with managers from research, production, and marketing on a major product modification. You notice that every memo you receive from the marketing manager has been copied to senior management. At every company function she spends time talking to the big shots. You are also aware that sometimes when you and the other project members are slaving away over the project, she is playing golf with senior managers. What is your evaluation of her behavior? As project manager, what do you do? The marketing manager seems to want to move up the management hierarchy as quickly as possible. There are two behaviors illustrating this desire. Sending copies of memos to senior management helps her maintain visibility in the company and lets senior management know of her management skills and accomplishments. Socializing with senior management at company functions or on the golf course also helps her maintain high visibility. These behaviors will help her to not be overlooked when deliberations for special projects or promotions are being made by senior management. The appropriateness of her behavior is another issue. If she is performing on the joint project as promised, then what she does otherwise is her business. If you, as the research scientist, also are looking for advancement opportunities, you should try to increase visibility, also. Look for ways to do so in ways that are acceptable to senior management in this organization culture. 9. You are a bright, hard-working entry-level manager who fully intends to rise up through the ranks. Your performance evaluation gives you high marks for your technical skills but low marks when it comes to people skills. Do you think people skills can be learned, or do you need to rethink your career path? If people skills can be learned, how would you go about it? Although some people seem to be naturally more adept at people skills, just as some are naturally more adept at technical skills or conceptual skills, people skills can be learned and there is no reason to rethink ones career path unless there is an unwillingness to improve in this area. People skills can be learned by taking behavioral classes, by modeling ones interactions after a supervisor or colleague who has excellent people skills, by participating in role playing exercises, and other activities that improve ones interactional skills. 10. How do you feel about having a managers responsibility in todays world characterized by uncertainty, ambiguity, and sudden changes or threats from the environment? Describe some skills and qualities that are important to managers under these conditions. Students responses will vary, but they should understand that even with the high levels of uncertainty, ambiguity, and sudden changes or threats present in todays environment, managers still have at least some useful information about alternative courses of action, the outcomes of those alternatives, and the likelihood of occurrence for each alternative, for each decision they face, and that information will help them make decisions that may well have a reasonably high payoff.
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20 Chapter 1

Managers must be able to quickly find the information they need in a wide variety of situations. Doing so requires both conceptual and technical skills, but may require a high level of human skills to create the relationships necessary to sustain the manager in times of crisis. The decisionmaking role becomes even more critical in this environment, as managers attempt to sort out the uncertainties and threats they face.

Teaching Note for Experiential Exercise

Management Aptitude Questionnaire Students should complete the questionnaire using the 5-point Likert scale. The scale is designed to give a general idea (it is not validated) of the three management skills of conceptual, human and technical skills. Such a scale can be used as a kind of mirror to the student. Undergraduates, particularly, lack knowledge about what the job of a manager is. Helping them to look at these three skill areas can be of some assistance in assessing their own abilities to be good managers. After the students score their questionnaires, you may ask them to share their scores in small groups of 4-5 and discuss their potential strengths and weaknesses as managers. Also, you may ask them to share answers to the following questions. These questions may be used with the entire class, without any small group discussions. 1. Why do you think the three skills are all needed to be an effective manager? Give examples of times when each one is used. Conceptual skills are used to understand large issues and problems, to develop vision and strategies, and to see relationships between one set of problems and others. Examples are developing strategies, analyzing the cause of problems from mounds of data, and applying theories to the situations at hand. Human skills include the ability to work with people and communicate effectively. Examples are listening, conflict resolution, running meetings, team building, mentoring, and negotiation. Technical skills include areas such as developing written plans, reading financial reports, computer and management information skills, and logistics. These skills are used in managing work processes and scheduling work flow and personnel. 2. What do you think the ideal ranking would be of the three skills for an effective manager? There is no one right answer for this, since it depends on the type and level of management. Generally, human skills are considered more vital in lower-level supervisors, and conceptual skills in executive-level managers, but even that is only a general guideline. Managers in a software company would need more technical skills than, say, an advertising executive.

Teaching Note for Ethical Dilemma

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Managing in Turbulent Times 21

Can Management Afford to Look the Other Way? 1. Ignore the problem. Jacobs contributions to new product development are too valuable to risk losing him, and the problems over the past 10 years have always worked themselves out anyway. No sense starting something that could make you look bad. Option 1 is the solution management has been taking for ten years, but it is taking Shellington into dangerous territory. The number and severity of complaints against Jacobs have been escalating, and continuing to ignore the problem could invite a lawsuit. 2. Launch a full-scale investigation of employee complaints about Jacobs, and make Jacobs aware that the documented history over the past 10 years has put him on thin ice. Harry may find that an immediate full-scale investigation is needed, even though it may temporarily disrupt company operations and hurt Shellingtons new product development. 3. Meet with Jacobs and the employee to try to resolve the current issue, then start working with Sally Barton and other senior managers to develop stronger policies regarding sexual harassment and treatment of employees, including clear-cut procedures for handling complaints. Option 3 is probably the most expedient way to deal with the current problem as well as to prevent future problems with Jacobs or others. Stronger policies and clear-cut procedures for handling complaints are needed. However, after talking with Sally Barton and other employees confidentially, Harry may find that an immediate full-scale investigation is needed.

Case for Critical Analysis

Electra Products, Inc. 1. How might top management have done a better job changing Electra Products into a new kind of organization? What might they do now to get the empowerment process back on track? Top management could have done a better job by introducing the planning for change very carefully and deliberately. A suggestion would be to have lower-level management and employees participate in the formulation and discussion of the merits of creating a learning organization. The paradigm of a learning organization is the responsibility of managers not to make decisions, but to create learning capability throughout the organization. In a learning organization, employees on the front lines routinely make decisions rather than passing them up the hierarchy for approval. There is no single model of a learning organization; it is a philosophy or attitude about what an organization is and the role of employees. Everyone in the organization participates in identifying and solving problems, enabling the organization to continuously experiment, improve, and increase its capability. In the learning organization, top managers are
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22 Chapter 1

leaders who create a vision for the future that is widely understood and imprinted throughout the organization. To get the empowerment process back on track, Martin Griffin must consult and work with the managers and employees of this learning organization. Griffin must empower employees to resolve the problem of morale and the need for change. Employees should have the opportunity to address their needs and how to bring about change. Self-directed teams are a possible solution where each employee has the opportunity to participate as a member of a team. They can identify problems that impact them and recommend solutions to permit a learning organization to move forward. 2. Can you think of ways Barbara could have avoided the problems her team faced in the meeting with department heads? Barbara Russell could have avoided the problems her team faced in meeting with department heads by anticipating the issues the department heads raised, or by asking the department heads what concerns they had, and then charging the team with developing solutions to those concerns. She could then have approached each department head in advance of the meeting to explain how the team addressed the department heads concerns, thereby gaining their support for the teams report even before it was presented to the group as a whole. 3. If you were Barbara Russell, what would you do now? Why? The best solution is for Barbara Russell to confront Martin about her sincerity in making empowerment work and then push for reform and work to gain support from other teams. Major changes like the ones her team is trying to implement do not happen overnight, and it is much too early to give up on their ideas. She has to get Martin on her side first, and then work at getting each of the department heads onboard. In addition, she will need to expend significant effort making sure that the manufacturing team retains its cohesiveness and enthusiasm while she works on Martin and the department heads. That will enable her to use the manufacturing team as an example to the rest of the organization in support of their empowerment ideas.

This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. This may not be resold, copied, or distributed without the prior consent of the publisher.